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HAC Concerned about Buy America Requirements

HAC Comments to USDA, July 2022

On July 29, the Housing Assistance Council (HAC) submitted comments to the U.S. Department of Agriculture (USDA), which proposed to establish waivers from Buy America requirements for purchases of de minimis, small grants, and minor components of infrastructure projects.

Key Takeaways

  • Housing and community facilities should not be considered public infrastructure under the Build America, Buy America Act.
  • If housing and community facilities are considered public infrastructure, it would be in the public interest to waive the Buy America preference for USDA’s programs to finance these construction projects so that scarce funds and staff resources can be devoted to addressing the current housing crisis.
  • Waivers for purchases of de minimis, small grants, and minor components of infrastructure projects would also be in the public interest.

HAC Comments to HUD, July 2022

HAC expressed concern about the impact of “Buy America” requirements on affordable housing in comments it submitted to the U.S. Department of Housing and Urban Development (HUD) on July 15, 2022.

Key Takeaways

  • Buy America preferences should not apply to assisted housing. HUD’s priority should be to address the affordable housing crisis. Furthermore, the law defines infrastructure as projects that benefit the general public, while assisted housing is available to only a subset of the general population.
  • HUD should not apply Buy America preferences to owner-occupied housing because the Office of Management and Budget has specifically stated that private homes are not considered to be infrastructure.
  • HUD should not apply Buy America preferences when HUD assistance is used for infrastructure that is built solely to support affordable housing, as is the case with the Self-Help Homeownership Opportunity Program (SHOP).
  • HUD should not apply Buy America preferences to housing that receives less than $250,000 in federal funding, to developments with fewer than eight units, or to situations when HUD funding covers only a small portion of the per unit development cost.
  • HUD should issue expedited waivers for materials that experience price spikes.
  • HUD should provide guidance to help reduce administrative burdens on entities that receive HUD funding.

Build America, Buy America

HUD, the U.S. Department of Agriculture (USDA), and other federal agencies are subject to a “Build America, Buy America” (BABA) requirement in the Infrastructure Investment and Jobs Act of 2021, which mandates that iron, steel, manufactured products, and construction materials used in infrastructure projects be American made. The provision applies to most federally funded infrastructure projects; it is not limited to projects funded through the 2021 Act.

Any preferences for American-made products that were in effect before the Infrastructure Act passed remain in place.

Federal agencies were required to publish initial lists showing which of their programs could be subject to the Buy America preference. The Office of Management and Budget issued guidance for federal agencies regarding compliance and set up a website to track agency requests for waivers.

HUD Implementation

On June 1, HUD requested public comment to help implement BABA for its programs. It asked questions such as what HUD-financed projects might fall under exemptions from the preference, how materials are currently sourced, and more. It also asked what HUD programs might be considered to fund infrastructure in addition to those on its initial list, which includes HOME, the Community Development Block Grant program, and SHOP.

The deadline for comments was later extended to July 15.

HUD has moved to waive the buy America requirement while the department works on implementing it. HUD announced it was providing two waivers, both effective on May 14 (the statutory deadline for implementation) unless it issued a later announcement changing the date. HUD’s general waiver is effective for six months. Its waiver for Tribal recipients of HUD funds lasts for one year.

USDA Implementation

USDA did not include any of its Rural Development agency’s housing or community facilities programs on its initial list of infrastructure programs, which focuses instead on utilities and broadband programs. In a recent request to OMB, however, RD did include housing and CF along with others on a list of programs it intends to evaluate under the new law.

USDA Rural Development, like HUD, hopes to delay the requirements’ effectiveness temporarily. It asked OMB to approve a waiver that would last six months after the date of approval.

Treasury Implementation

The Treasury Department’s list of programs that may be subject to BABA’s requirements does not include any Community Development Financial Institution Fund programs. It does include the Homeowner Assistance Fund, a program intended to help homeowners impacted by the coronavirus pandemic, and the Coronavirus State and Local Fiscal Recovery Funds programs, which help state, local, and Tribal governments and can be used for housing.

 

Introduction to USDA's Mutual Self-Help Housing

Self-Help Housing Trainings from HAC’s Conference

Self-Help Housing

There are many potential homeowners who fall short financially but are able to contribute time and labor toward the construction or rehabilitation of their homes.

The self-help housing model helps bridge the gap in housing affordability by having participant families work together to build their homes. Instead of requiring a down payment, the prospective homeowners contribute their own labor to the project. When these families work together, they learn valuable construction skills and build a sense of community with their neighbors.

These five workshops, first recorded at HAC’s Virtual National Rural Housing Conference, provide an overview of the self-help housing process, how it works, and information on how local organizations can incorporate it into their efforts.

This session provides an overview of USDA’s Mutual Self-Help Housing program. It covers funding possibilities, regulation requirements, and the grant application process, as well as eligible grant uses, program development, staffing needs, and feasibility.

USDA-supported self-help housing rehab activities (acquisition/rehab and owner-occupied rehab) can be viable additions to affordable housing work. This session is designed for organizations currently active in the program as well, as those considering it. Workshop leaders share the latest instructions and guidance governing rehab activities and show before-and-after pictures of self-help projects. The discussion focuses on challenges, successes, and best practices in delivering the program. The audience was able to ask questions about the impacts of COVID. One of the presenters shares the key to the self-help method with a quote.

“Helping people help themselves benefits the participants and the community while making better use of scarce resources.”

In this session, experts present information on recent improvements to SHARES for group coordinators. Workshop leaders also provide an overview of how to use e-Forms for submitting Section 502 and 504 applications. A nonprofit marketing specialist provides strategies for how to use social media, email marketing, and design to share about your work with self-help programs. Self-help grantees are encouraged to share their updates on https://www.selfhelphousingspotlight.org/.

Learn what’s new in Section 502 loan packaging and how to avoid common errors and omissions that cause delays in processing 502 loan applications. This session will help packagers improve the quality and completeness of applications to get faster loan closings for families.

5 challenges in 502 Packaging

  1. Significant Delinquencies, how credit worthiness impacts application processing and what can be done to streamline this step.
  2. How to account for full-time student income and student loan debt.
  3. COVID’s impact on calculating income and how to account for variations.
  4. What forms of verification are acceptable and what can a packager use to verify application details?
  5. What has COVID’s impact been on budgets and materials and how to best incorporate them into the loan process?

The coronavirus pandemic’s cost overages, material delays, and numerous other challenges have intensified the need for leveraged funds in self-help housing programs. Learn how leveraged funds can not only increase affordability and resources for applicants, but also build an organization’s capacity and control. Leveraging can also better position an organization for program diversification to address community needs.

Loan Fund FY 21 Impact Report

HAC Loan Fund FY 2021 Impact Report

HAC is proud to present our 2021 Loan Fund Impact Report. In fiscal year 2021 (October 2020-September 2021), we financed the construction, preservation, or rehab of 775 affordable homes. By closing 33 loans, we invested $15.9 million in rural communities and leveraged $177.6 million in additional investments. Our lending has helped hundreds of rural families find safe, healthy, and affordable places to call home. Over 40% of these families live in persistent poverty counties, where the poverty rate has been at least 20% for the last 30 years.

Loan Fund Impact Report FY 2021 by Mackenzie Webb

The Castro Family's Self-Help Housing Story

Self-Help Homeownership: What it means to Families

We are proud of the families we’ve helped achieve the dream of homeownership. This series highlights the incredible impact we’ve made thanks to the US Department of Housing and Urban Development’s Self-Help Homeownership Opportunity Program. Homeownership changes lives—it can be a gateway to financial stability and better quality of life. The four families featured here all know the difference a home can make. Congratulations to all of them for the extraordinary achievement of building a home!

The Castro Family

With the help of People’s Self-Help Housing, the Castro family built their own home in King City, California. This is their new home:

Ben Phelps

Ben Phelps built his new home in Heber, Utah, thanks to support from Self-Help Homes of Utah. Here’s how his new home has made a difference in his life:

The Root Family

Self-Help Homes of Utah also helped the Root family build their own home in Heber, Utah. Here’s what their home means to them:

The Smith Family

With the help of People’s Self-Help Housing, the Smith family built their own home in Boone County, Arkansas. This is their new home:

 

Over the last 25 years, the Housing Assistance Council has financed the construction of over 10,000 new self-help homes. Under the self-help model, homeowners help build their homes, contributing “sweat equity” instead of a traditional down payment.

SHOP Application Reference Material

Application Materials

The following links are provided to assist you in completing a 2021 Self-Help Homeownership Opportunity Program (SHOP) application. These links provide additional information on program and eligibility requirements.

  1. FY 2021 SHOP NOFO
  2. Eligibility Requirements for Applicaitons of HUD’s Grant Programs
  3. General Administrative Requirements and Terms for HUD’s Financial Assistance Awards
  4. Federal Register Notice

Building homes together in America’s “most rural state”

As part of National Homeownership Month, we’ll be highlighting stories from across our network participating in the U.S. Department of Housing and Urban Development’s (HUD) Self-Help Homeownership Opportunity Program (SHOP). HAC provides loan funds to self-help housing providers to help low- and moderate-income families achieve their dreams of homeownership. The homebuyer family must contribute a significant amount of sweat-equity towards the construction of the dwelling. Loan funds are awarded through a competitive application process. If the organization meets certain requirements, up to 90% of the SHOP loan may be forgiven. The forgivable portion may become a grant for the group to establish its own revolving loan fund for future site acquisition and development of self-help housing or to provide direct subsidies to participating homebuyer families.

Community Concepts staff and supporters celebrate the completion of news self-help units in 2019

Community Concepts staff and supporters celebrate the completion of news self-help units in 2019

Following the 2010 Census, Maine was dubbed “the most rural state” with 61.3% of its residents living in rural communities. Homeownership is common among Mainers, with 71.5% of all units being owner-occupied. Though poverty rates in Maine are lower than the national average (13.5% vs. 15.1%), the state has higher rates of residents receiving income through Social Security, Supplemental Social Security, and Public Assistance making it challenging for many to qualify for a mortgage.

Community Concepts, Inc., based in Lewiston, Maine, got its start in 1965 as part of federal legislation that created a network of Community Action Agencies. Community Concept’s programming focuses on the “whole family”, addressing the needs of parents and their children with programs like Head Start, fuel assistance, weatherization programs, and self-help homeownership. In 1991, HAC provided a planning grant to Community Concepts to help initiate the self-help homeownership program at the organization. “Since that first grant, we’ve completed 350 self-help home ownership opportunity, including new construction and a purchase/repair program we added 10 years ago,” shared Sandy Albert, Director of Housing Improvement Services.

The organization sees a lot of overlap in the clients it serves and that is intentional. “We have family development coaches that are working with families,” says Albert. If a family of renters comes to the agency looking for help with fuel assistance the coach will also ask if they’re interested in becoming a homeowner. The coach will then refer the family to other programs in the organization that can help them pursue homeownership or, if necessary, help build their credit.

One of those families, the Hoyts, achieved their dream in May 2012. Working together with five other families, the Hoyts learned valuable construction skills as they worked on their home. Through their sweat-equity, each family saved as much as $20,000 on the cost of their home. In a letter shared by Community Concepts, Eric Hoyt wrote “This is not a house that you’re building it’s a home, and it’s a heartfelt build. With a lot of meaning that goes into it. There is a lot of hours and tears and fears but through them all when you walk through the door and you say look at what we have. When you look at what you and your team has accomplished it makes it that much more a home.”

Albert credits the program’s success and impact to Community Concept’s partnership with HAC. “Without the funding through SHOP, many of our buyers would not qualify even with the sweat-equity,” said Albert “those families wouldn’t be where they are today.”